KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
The S&P 500 struggled for direction on Thursday, holding just shy of its all-time high as traders weighed next week’s Federal Reserve decision, uneven economic data, and renewed volatility in crypto and bonds. Bitcoin halted its rebound, Treasury yields climbed, and equities lacked clear momentum.
The index closed near 6,860, barely moving on the day. Despite a drop in jobless claims — distorted by Thanksgiving timing — expectations for a Fed rate cut next week remained firm. Small caps outperformed, with the Russell 2000adding 0.8%. Meta rose after reports it may cut spending in its metaverse division, while Hewlett Packard Enterprise fell in late trading after a disappointing sales outlook.
Recent jitters around elevated artificial-intelligence valuations briefly pressured markets, but optimism around the sector’s earnings potential and anticipated policy easing continue to support the broader rally.
Rate Cut Hopes Keep Seasonal Rally in Play
“The key question is whether a potential rate cut next week can trigger a Santa rally,” said Fawad Razaqzada of Forex.com, who noted that the outlook remains constructive but more hesitant.
Mark Newton of Fundstrat said early December could be choppier than the latter half of the month, noting that industrials, financials, and small caps are climbing as expectations for a December cut approach certainty.
Technical indicators have improved following the sharp rebound from late November. However, traders expect volatility to persist until after the Fed meeting.
Craig Johnson of Piper Sandler said the market’s “risk-on” tone remains intact, driven by rate-cut expectations and a broader rotation into smaller stocks, though further consolidation is likely as major indexes test their year-to-date highs.
Matt Maley of Miller Tabak added that unless the market reverses sharply in the coming days, “the advantage will be with the bulls.” He sees small caps as a potential outperformer in a strong year-end rally but warned that any sharp pullback in mega-cap tech could derail momentum.
At Interactive Brokers, Jose Torres said the cyclically driven Russell 2000 is sustaining its momentum and is well-positioned to benefit from looser financial conditions and a still-solid economy.
Ulrike Hoffmann-Burchardi of UBS Global Wealth Management expects U.S. equities to rally into 2026, urging under-allocated investors to add exposure. She said the next phase of market gains could broaden beyond tech to include health care, utilities, and banking.
Labor Data Reflects Crosscurrents
New U.S. jobless claims fell to their lowest level in over three years, suggesting companies are still holding workers despite high-profile layoffs. Separate Challenger, Gray & Christmas data showed announced layoffs declined in November after a surge in October, though still the highest for any November in three years.
Policymakers will not have the November jobs report before next week’s meeting. The report, delayed due to the prolonged government shutdown, will now be released on Dec 16 and will include revised October payrolls.
“The labor market is not collapsing,” said Don Rissmiller of Strategas. “We continue to believe the Fed will cut the funds rate by 25 basis points in December.”
Inflation Remains Sticky but Stable
Despite divisions within the Fed, markets expect policymakers to shift toward easing. Friday’s long-delayed September income and spending report will include the PCE price index, the Fed’s preferred inflation measure.
Economists expect a third straight 0.2% increase in core PCE, keeping the annual rate just below 3% — a sign inflation is moderating, but still above target.
“We expect two rate cuts by the end of the first quarter of 2026,” said Hoffmann-Burchardi of UBS. “Friday’s PCE report is likely to show price pressures under control.”
Key Takeaways
The S&P 500 remains just below record highs as traders await the Federal Reserve’s policy decision next week.
Market expectations point to a near-certain December rate cut, supporting hopes for a year-end rally.
Small caps, industrials, and financials are leading gains as the rally broadens beyond mega-cap tech.
Technical conditions have strengthened, but choppy trading is expected until after the Fed meeting.
Labor data remains mixed: layoffs elevated but jobless claims at a three-year low.
Core PCE inflation is expected to rise 0.2 percent, keeping annual inflation below 3 percent but still sticky.
UBS expects two rate cuts by Q1 2026 and sees broader sector participation in the next leg of the rally.
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